LANSING, Mich. — State Sen. Ken Horn on Thursday announced formal recommendations and actions the Michigan Unemployment Insurance Agency can take to better improve security and reduce fraud, while also better serving those who are forced to rely on the agency due to government-mandated shutdowns.
“I was tasked by Senate Majority Leader Mike Shirkey to investigate not only the Deloitte audit that UIA commissioned but the management of the crisis by the governor’s administration and UIA leadership,” said Horn, R-Frankenmuth. “The audit outlined clear problems within the agency that allowed hundreds of millions of dollars of fraud to occur, while also shutting off payments to rightful benefit recipients in the middle of their claims. It’s clear that it didn’t have to be like this.”
The Senate Economic and Small Business Development Committee, chaired by Horn, held hours of committee testimony as they heard from the acting head of the state’s unemployment insurance agency, the Department of Labor and Economic Opportunity, and others involved in the process, seeking to get to the bottom of issues that allowed fraudulent claims to occur and how the agency is working to correct these shortfalls.
“The extended shutdowns understandably overwhelmed the system but there’s no doubt the administration and former director panicked under the intense volume of claims and pressure from the Legislature as we were contacted by thousands of jobless constituents,” Horn said. Administratively suspending all normal controls allowed rampant fraud to occur. Under new pressure to address the fraud, the pendulum swung back the other way and 500,000 legitimate claims were frozen while proper identity verification was put back into place.”
To spur action within the agency, Horn outlined the nine recommendations for statutory and administrative change that would improve access for claimants and reduce fraudulent activity. The first recommendation is to immediately reopen offices for in-person visits. You can find the entire list of recommendations here.
“The most important and helpful thing the agency can do right now is open offices to allow in-person assistance,” Horn said. “My office, and every other legislative office on both sides of the aisle, has been inundated with calls from people who have nowhere else to turn. We also learned we can never again allow an agency head, director or governor to turn off provisions of statute or preexisting policy with no review or collaboration with the Legislature and other affected parties who understand the pitfalls.
“Following the audit, some policy improvements have been put into place, but my report outlines other changes that need to be adopted and codified into law. The governor and agency need to know they never needed to go it alone. The administration and the Legislature can and should work together to handle crises like this.”